Virgin Bank could yet have Northern Rock core

Finance
Written by Gary Howes
Monday, 11 January 2010
Virgin Money seriously pursuing Northern Rock purchase. The reality of a Virgin Bank draws closer; this morning it is reported that Blackstone, the US private equity firm, has been approached by Sir Richard Branson's Virgin Money about backing a renewed bid for state-owned Northern Rock. Related Articles: RBS rules out Virgin Money for branches RBS sale to Santander will scupper hopes of sector diversity RBS branches could go to Santander SA RBS set to offload in Asia RBS branch sale race heating up The buy-out house is among several firms that Virgin has talked to as it works on finding a partner for its financial services business in preparation for its move on Northern Rock's "good bank" spun out of the state-owned lender and thought to be worth up to £2bn, the Telegraph reports. Last week Virgin Money was in the news after it announced it would acquire Church House Trust. Church House Trust, which is based in Yeovil, Somerset, is a minnow compared with Northern Rock. For the financial year ended December 31, 2008, it reported operating income of £4.05 million and profit before tax of £450,000. Analysts say it is the banking license that Virgin is after. The bank, in which the Cayzer Trust is a major shareholder, offers both deposits and mortgages, and Virgin said that its business model did not rely on the wholesale markets for funding, unlike some of its larger regional cousins. Retail deposits are more than double its loan book. Virgin Money has announced a concerted growth plan in 2010 - all of which is expected to ultimately lead to a Virgin Bank. Jayne Anne Gadhia, chief executive of Virgin Money, said the group had "very significant growth plans". Initially the bank will offer its products online but it also plans to open a series of "Virgin Money Shops" on the high street. Meanwhile Virgin Money is to expand its office in Edinburgh as a result of the firm's £50 million acquisition of the tiny Yeovil-based private bank Church House Trust last week. Gadhia said: "We see back office operations in Edinburgh growing. Over time we will have some good news for jobs in Edinburgh." By the end of the year she said Virgin Money would offer the "full range of retail banking products" from current accounts, mortgages, savings and loans. Share this: digg del.ico.us Newsvine Reddit Furl technorati Facebook Comments (0) Subscribe to this comment's feed Post a comment Name (required) Email (required) (not published) Website Title By posting on this website you are agreeing to abide by our website comment policy and all posts are subject to the approval of the website editor. We will remove posts that contain offensive or threatening language, personal attacks on the writer or other posters, posts that are off topic and posts that are considered spam or specifically used to promote any commercial products or services. Any poster who repeatedly contravenes the policy will be banned from posting on the website.